SmartKem, Inc. announced that it has entered into subscription agreement for private placement of 9,229 shares of its Series A-1 Convertible Preferred Stock, stated value $1,000 per share, 2,950 shares of its Series A-2 Convertible Preferred Stock, stated value $1,000 per share, Class A Warrants to purchase up to 48,716,000 shares of its common stock and Class B Warrants to purchase up to 27,943,860 shares of its common stock, for aggregate gross proceeds of approximately $12.2 million on June 14, 2023. The shares of A-1 Convertible Preferred Stock are initially convertible into an aggregate of 36,916,000 shares of common stock of the Company, and the shares of Series A-2 Convertible Preferred Stock are initially convertible into an aggregate of 11,800,000 shares of common stock of the Company. The conversion price of preferred shares are $0.25.

The Class A Warrants have an exercise price of $0.25 per share, are exercisable immediately, and will expire five years from the date of issuance. The Class B Warrants have an exercise price of $0.01 per share, are exercisable immediately, and will expire five years from the date of issuance. The Company may sell additional securities in the private placement for aggregate proceeds of up to $18.0 million, less the gross proceeds received at the initial closing described above on or prior to 5:00 p.m. on June 23, 2023.

The company has raised $12.299 million pursuant to exemption provided under Regulation D from 80 investors.